The B.C. government is introducing a limit on payouts for pain and suffering to ICBC customers. By April 1, 2019, the province will only pay out a maximum of $5,500 for pain and suffering following a crash.

“ICBC was created to provide affordable insurance to all B.C. drivers, but years of reckless decisions by the previous government have thrown the corporation into financial chaos,” Attorney General David Eby said in a statement. “Today we start making the tough decisions that will stem ICBC’s losses, keep insurance affordable and provide enhanced care for people injured in automobile accidents.”

British Columbia is the last province in the country to apply a cap on minor injury payouts, like soft-tissue injuries. Part of the challenge for ICBC is that the average claim for minor injuries has gone up from $8,220 in 2012 to $30,038 in 2016.

The cap is only applied to pain and suffering. While the average payout for a minor injury in 2016 was $30,038, the average pain and suffering award was $16,500.

It is measured completely separately from wage loss, medical care and legal costs.

“This initial set of changes is just one of many different reforms we are bringing forward,” said Eby. “This is a really significant piece, the savings are estimated to be projected at about $1 billion at ICBC.”

Right now ICBC is dealing with about 50,000 minor injury claims a year. The B.C. government is struggling to keep ICBC financial viable. The province is projected a $1.3-billion loss in the 2017-18 fiscal year.

LISTEN: Would you support a cap for ICBC claims?

Cutting legal costs

The government is also looking to crack down on soaring legal costs. ICBC numbers from 2016 show that 24 per cent of what people pay for insurance goes to legal costs.

Among the changes introduced on Tuesday is a new independent dispute resolution process for minor injury claims. ICBC customers can apply to have their case seen by the Civil Resolution Tribunal to assess whether the claim amounts are fair. It will be independent from ICBC, take challenges to Supreme Court resolved within 60 to 90 days.

Lawyers aren’t required, but people could bring a lawyer.

B.C. is the last province in Canada with no restriction of what you can sue.

“There are still very significant savings to be found on the legal side of the ledger,” said Eby. “There are still major injury claims that will go through the court system. We are hoping the legal community will work with us to drive down some of those costs.”

Moving to ‘care-based model’

The final change announced by Eby is changing the system to a “care-based model.” ICBC will be moving more money towards treatment and support rather than cash payouts. The change will come in as soon as the legislation passes and will be retroactive to the beginning of the year for all open claims.

Part of the change is an increase in full accident benefit payouts from $150,000 to $300,000. That increase covers care and recovery, speech therapy, dental care, occupational therapy and other treatments. ICBC will also increase benefits starting April 1, 2019 for funeral costs from $2,500 to $7,500 and wage loss payments from $300 per week to $740 per week.

LISTEN: Changes coming for ICBC, but will it be enough?

“Disability Alliance BC has been advocating for improvements to accident benefits for 12 years,” said Jane Dyson, the DABC’s executive director in a statement. “The doubling of the overall allowance for medical care and recovery is a significant improvement. We welcome these long-overdue changes that will mean that people who are catastrophically injured in motor vehicle accidents have better supports available to help them rebuild their lives.

The province has not yet announced potential rate changes or rate increases. The province will be making it more expensive for drivers who have caused crashes or have multiple driving violations to get basic insurance.

The province has already committed to a 6.4 per cent increase this year for basic insurance. Eby says his goal is to get rate increases down to inflation levels.

“It will take years to get ICBC back under control,” added Eby.

Liberals calling on even more changes

Andrew Wilkinson says the NDP proposed changes do not go far enough. The new B.C. Liberal leader says the government’s announcement is ‘a disappointed conclusion’ for British Columbians because it doesn’t address rates.

Wilkinson instead wants whole sale changes at the public insurer.

“It’s a state run monopoly and it’s time to re-examine the whole thing,” said Wilkinson. “ICBC has become much less functional in the last few years.”